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Policy paper

Removing the impact of changes in inflation from the welfare cap

The methodology for removing the impact of changes in inflation from the welfare cap, as required by the Charter for Budget Responsibility.

Updates to this page

From:
HM Treasury
Published:
2 March 2017
Last updated:
18 March 2022
Show all updates

  1. Updates to note and spreadsheet

  2. Revisions to notes and spreadsheet.

  3. Updated technical note and welfare cap inflation sheet

  4. First published.

This was published under the 2016 to 2019 May Conservative government

Documents

Technical note on welfare cap inflation

PDF, 122 KB, 2 pages

Elasticity tables

MS Excel Spreadsheet, 43.5 KB

Details

The welfare cap is one of the government’s fiscal rules. It maintains control of welfare spending. To ensure that changes in inflation-linked uprating assumptions will not increase pressure on the welfare cap or create headroom within it, the impact of changes in inflation assumptions on spending within scope of the welfare cap will be excluded from the welfare cap. The Charter for Budget Responsibility requires the Treasury to specify the definition of the changes in inflation for this purpose, which are set out in the technical note on this page and accompanying tables.

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